Tuesday, 31 May 2011

As a doomsayer from the start, who has written several times on the subject, I have recently been reluctant to burden my readers with more jeremiads about the euro.

'Why is the euro in crisis? Because it was fundamentally flawed at its inception'Photo: GETTY

But fasten your seatbelts. Here I go again. My excuse is that this crisis keeps surprising the unwary. There is so much to say that I will have to have several bites.

Before we can find solutions, which I will discuss at a later date, first the causes. Why is the euro in crisis? Because it was fundamentally flawed at its inception. Only good luck, strong economic growth and enlightened economic management could keep it together. In fact, the eurozone has had to suffer the opposite of all three.

Giving up sovereign currencies is a serious challenge. Exchange rates act as a safety valve. When you remove them, the pressure either has to be reduced or it will find some other way out. In a fixed exchange rate system, such as the ERM, currency speculation could and did break the system. Advocates of the euro project drew comfort from the fact that, by contrast, a full monetary union is immune from such attacks.

It was recognised that economic and financial pressure might still find an outlet as countries which diverged from the core had to face higher bond yields. But this would be a good thing. The prospect of it should serve to restrain them. It wasn’t imagined, though, that strain in the bond markets could threaten the stability of the euro itself.

Failures

Four things went wrong. The first two were private sector failures. First, far from reacting to their newly shackled state, Spain and Ireland went on a private sector spending spree. (Meanwhile, in Greece the government led the bonanza.) Second, in all these cases, the bond markets were hopeless at foreseeing possible difficulties and imposed bond yields only marginally higher than on Germany. Accordingly, they provided no restraint at all.

The third and fourth were failures of government. The authorities presided over an extremely shaky banking system, acutely vulnerable to shocks. And their policies over many years resulted in a high government debt to GDP ratio, not only in the peripheral countries, but also in the supposedly solid core. In common with almost everyone else, the European authorities grossly underestimated the possibility of sovereign default as a realistic threat and market worry, and underestimated its capacity to cause a full scale banking crisis.

The fact that the political elite ploughed on with the euro project was the result of profound arrogance. Where possible, electorates would be denied the chance to say whether they approved of the euro and other aspects of integration. Where they had to have their say, they would be compelled to go on voting until they said “yes”. The current crisis has the same roots. The project’s difficult economics would be overcome by the politics. The Brussels establishment would ensure that everything turned out all right.

But it hasn’t. Now the economics threaten to overwhelm the politics. Greece’s sovereign indebtedness is so high that it is impossible to see how it can honour its debts without outside help (ie. gifts). And the economy will go on contracting for years. There will have to be “an event”. The only issues are when this will happen; who will pick up the tab; and what it will be called.

Nomenclature

This being the European Union, nomenclature is extremely important. Of course it won’t be called a default – I doubt it will be called anything beginning with “de”. Bad things begin with de – like decline and defeat. It will be called something beginning with “re”. Good things begin with “re”, including rebirth and renewal – and restructuring and reprofiling. But default it will be.

Who picks up the tab is important because the bill could seriously undermine some banks. Remarkably this threat includes the ECB itself because it has taken on a large amount of Greek debt. The rows over the bill are likely to delay any sort of solution and to poison the atmosphere between member states. Meanwhile, the fate of the European banking system will be hanging by a thread.

This is why the “when” issue is so important. The current approach is to try to stave off the event until things get better. You will notice that this bears a striking similarity to the sophisticated strategy adopted by British banks in the face of dud commercial property loans, namely “delay and pray”. Mr Micawber had the same idea but expressed it differently.

So even though the markets cannot cause the euro to break up by exchange rate pressure, they can cause an internal financial crisis worse than any currency panic. The prospect, or the reality, of such a crisis could yet cause some European leaders to precipitate the end of the euro as we know it.

By Roger Bootle who is managing director of Capital Economics and economic adviser to Deloitte.

Monday, 30 May 2011

My Blog Is Also Paying My Bills

By KATE MURPHY Jim Wilson/The New York Times

Darren Kitchen, shown with Shannon Morse, a host on his webcast, sells items on his computer-hacking Web site.

Casting the digital equivalent of a message-in-a-bottle into the Internet’s vast sea of content, many people start Web sites or blogs hoping that they will find an appreciative audience for their precocious parrot videos, cupcake recipes or pithy commentary on everyday life. The dream, of course, is that they will develop a large and loyal following — and potentially profit from it.

Bron Johnson

Cloud photos taken by Kelly DeLay on his Web site, the Cloud 365 Project. Visitors donate a total of $200 to $400 a month to the site.

While most of these self-publishers don’t attract the attention of anyone other than indulgent family and friends, there are those who find wider recognition and some income. What the successful have in common is a passion for their subject and a near-compulsion to share what they know. Advertising, merchandising, offline events, book deals, donations and sometimes sheer luck also play a part.

“My advice is to choose a topic you’ll never get tired of,” said Stephanie Nelson, 47, of Atlanta, a homemaker who founded CouponMom.com in 2001 to share tips on saving money by using coupons. “The first three years I made no money at all, so I had to love what I was doing to keep going.”

Ms. Nelson said her Web site now has more than 3.8 million visitors a month, and the income it generates supports her family of four — allowing her husband to retire early from his corporate job five years ago. “I’m still not tired of it,” Ms. Nelson said.

Half of the site’s revenue comes from Google’s AdSense service, and the other half is from companies like Groupon and LivingSocial that buy ads directly from her. AdSense generates ads based on the words that appear on Web pages. For example, if a blog post is about dogs, ads for dog food or dog grooming might appear beside it.

Many of the Google ads generate income only if people click on them — usually yielding a fraction of a cent per click. It’s also possible to get paid every time a Google ad appears on a page. Rates are determined in part by advertisers bidding in an online auction.

Other companies like BuySellAds.com and BlogAds allow self-publishers to determine what they want to charge for placing an ad on their sites. They then match sites with eager advertisers for a percentage of ad sales — 14 to 30 percent is typical.

Federated Media, which is a sort of Web talent management company, is more selective, negotiating rates on behalf of independent content creators it agrees to represent. In general, online ad rates vary widely, from $54,000 a day for an ad on a popular blog like PerezHilton.com to $10 a month for an ad on the cartoon blog The Soxaholix. (The New York Times Company is an investor in Federated Media.)

Clayton Dunn, 32, and Zach Patton, 31, the bloggers behind The Bitten Word, make around $350 a month from pay-per-click Google ads, and in commissions from Amazon.com when readers follow links to cooking gadgets, books and magazine subscriptions they recommend. Mr. Dunn and Mr. Patton, who live in Washington and blog about recipes they have tried from popular magazines, started the site in 2008 and now have about 150,000 visitors a month.

“It more than pays for the groceries,” said Mr. Dunn, who added that they are further compensated by readers who may give them delicacies like fresh avocados and Hawaiian ginger syrup.

For those who want to generate more income through advertising, Jonathan Accarrino of Hoboken, N.J., founder of the technology news and how-to blog MethodShop.com, advises having contextual ads, which are highlighted words in posts that provide a link to the vendor of a relevant product or service. A commission is paid on resulting sales.

Adding video to a post is another strategy that Mr. Accarrino said contributes to his blog’s six-figure yearly income: “I’ll record video walk-throughs of my tutorials and upload them to Blip.tv,” a video sharing service similar to YouTube. And like YouTube, Blip.tv gives users the option to run ads with their videos. These generate $1 to $10 for every thousand views, depending on the advertiser.

Indeed, many video bloggers, or vloggers, make money this way. Sheila Ada-Renea Hollins-Jackson, a 22-year-old makeup artist in Farmington, Mich., makes up to $200 a month from the 63 videos about beauty treatments she has posted on YouTube since 2008. “It pays my cellphone bill,” she said. Vloggers either apply or are invited by YouTube to display ads based on demonstrated viewership or outstanding content.

Selling merchandise on a vlog, blog or personal Web site can bring in even more cash. Darren Kitchen, 28, of San Francisco said he makes $5,000 a month selling stickers, T-shirts, baseball caps and computer hacking tools on his Web site, Hak5.org, which offers a weekly video show about computer hacking.

“It’s crazy how many people want the stickers,” said Mr. Kitchen, who started Hak5 in 2005 and says he has 250,000 monthly viewers.

Book deals are the ultimate goal for many bloggers who are aspiring writers. Molly Wizenberg, 32, of Seattle, started her blog, Orangette, in 2004 as a way to hone her writing skills after dropping out of a Ph.D. program in anthropology.

Her musings about food and life attracted 350,000 visitors a month and the attention of Simon & Schuster, which led to the publication last year of her book, “A Homemade Life: Stories and Recipes From My Kitchen Table.” Last month she signed a contract to write another book. “It’s beyond what I ever imagined,” Ms. Wizenberg said.

Some people simply ask their fans and followers to make donations to support their creative efforts. Kelly DeLay of Frisco, Tex., said he gets $200 to $400 a month from visitors to his Web site, The Clouds 365 Project, where he posts a daily photograph of cloud formations. “People can be very generous,” said Mr. DeLay, who began taking pictures of clouds full-time after he was laid off from his job as an interactive media director last year.

Charging for content is also an option. Collis Ta’eed, 31, of Melbourne, Australia, founded FreelanceSwitch.com, which gives practical advice to freelancers, and Tuts+, which offers technology-related tutorials. He said he brought in $150,000 a month from his sites, most of it from premium content — primarily tutorials and e-books.

“People will pay for content if you offer them something of value that is authentic and is generally useful,” said Mr. Ta’eed, who said his two blogs together have 6.4 million visitors a month. One example of useful content is FreelanceSwitch’s job board, which brings in $7,000 a month, he said. Job posters pay nothing; job seekers pay $9 a month.

And sometimes people will pay to attend events organized by bloggers they admire. Steve Pavlina of Las Vegas said he made $40,000 from weekend workshops that were an outgrowth of his blog,StevePavlina.com, which focuses on issues related to personal development. He started the blog in 2004 and says it has 2.5 million visitors a month. Besides workshops, he said he made about $100,000 a month in commissions from sales of products like speed-reading courses and high-speed blenders that he recommends on his blog.

“I tell people if they want to start a blog just to make money, they should quit right now,” Mr. Pavlina said. “You have to love it and be passionate about your topic."

Sunday, 29 May 2011

The US wants to turn the Arab revolutions into eastern Europe part 2. It is destined to fail

The first wave of Arab revolutions is entering its second phase: dismantling the structures of political despotism, and embarking on the arduous journey towards genuine change and democratisation. The US, at first confused by the loss of key allies, is now determined to dictate the course and outcome of this ongoing revolution.

What had been a challenge to US power is now a "historic opportunity", as Barack Obama put it in his Middle East speech last week. But he does not mean an opportunity for the people who have risen up; it is a chance for Washington to fashion the region's present and future, just as it did its past. When Obama talks of his desire "to pursue the world as it should be" he does not mean according to the yearnings of its people, but according to US interests.

And how is this new world to be built? The model is that of eastern Europe and the colour revolutions; American soft power and public diplomacy is to be used to reshape the socio-political scene in the region.

The aim is to transform the people's revolutions into America's revolutions by engineering a new set of docile, domesticated and US-friendly elites. This involves not only co-opting old friends from the pre-revolutionary era, but also seeking to contain the new forces produced by the revolution, long marginalised by the US.

As Obama put it last week: "We must … reach the people who will shape the future – particularly young people … [and] provide assistance to civil society, including those that may not be officially sanctioned."

To this end he has doubled the budget for "protecting civil society groups" from $1.5m to $3.4m.

The recipients are not only the usual neoliberal elements, but also activists who spearheaded the protest movements, and mainstream Islamists.

A number of Arab activists, including the Egyptian democracy and human rights activist Esraa Abdel Fattah, were invited to an event hosted by the Project on Middle East Democracy in Washington last month – one of many recent conferences and seminars. Meetings between high-ranking US officials – such as the House majority leader, Steny Hoyer – and the Muslim Brotherhood took place in Cairo last month, while the deputy chairman of Tunisia's Islamist Ennahda party has recently returned from a visit to Washington to "discuss democratic transition".

Washington hopes that these rising forces can be stripped of their ideological opposition to US hegemony and turned into pragmatists, fully integrated into the existing US-led international order. Dogma is not a problem, as long as the players agree to operate within parameters delineated for them, and play the power game without questioning its rules. It remains to be seen, however, if they risk losing their popular base in return for US favours.

Containment and integration are not only political, but economic, to be pursued through free markets and trade partnerships in the name of economic reform. Plans "to stabilise and modernise" the Tunisian and Egyptian economies – already being drafted by the World Bank, IMF and European Development Bank at Washington's behest – are due to be presented at this week's G8 summit.

A $2bn facility to support private investment has been announced, one of many initiatives "modelled on funds that supported the transitions in eastern Europe".

As usual, investment and aid are conditional on adoption of the US model in the name of liberalisation and reform, and on binding the region's economies further to US and European markets under the banner of "trade integration". One wonders what would be left of the Arab revolutions in such infiltrated civil societies, domesticated political parties, and dependent economies.

However, although the Obama administration may succeed with some Arab organisations, its bid to reproduce the eastern European scenario may be destined to fail. Prague and Warsaw looked to the US for inspiration, but for the people of Cairo, Tunis and Sana'a the US is the equivalent of the Soviet Union in eastern Europe: it is the problem, not the solution. To Arabs, the US is a force of occupation draped in a thin cloak of democracy and human rights.

No one could have offered stronger evidence of such a view than Obama himself, who began his Middle East speech with eulogies to freedom and the equality of all men, and ended it with talk of the "Jewishness of Israel", in effect denying the citizenship rights of 20% of its Arab inhabitants and the right of return of 6 million Palestinian refugees. In vain does the US try to reconcile the irreconcilable – to preach democracy, while occupying and aiding occupation.

ON THE BEAT WITH WONG CHUN WAI

The former have had bad press but they may be better than they are made out to be. But the latter cannot be excused at all.

I HAVE finally turned 50. The day started off with a breakfast of two half-boiled eggs with the right dash of soya sauce and pepper, and a cup of hot Milo.

It’s a simple pleasure in life and certainly most Malaysians would describe our traditional breakfast as heavenly.

I am sure it’s a Malaysian creation. I still do not know why Singapore has not staked a claim on this brilliant culinary work.

Maybe Singapore refuses to be associated with anything that’s regarded as half-measured, half-done or half-boiled. But hey, our national tolerance for mediocrity is higher, so if it tastes good, who are others to tell us otherwise.

I do not know whether our penchant for half-boiled eggs has anything to do with the national psyche but let’s not allow jealous foreigners to divide us. We do not want Perkasa to turn this into a nationalist frenzy over half-boiled eggs and we certainly don’t want Ibrahim Ali to issue “ada telur” dares to imagined foes.

Half-boiled eggs would be frowned upon in Western countries, where most hotel kitchens refuse to accept such orders as the eggs would not be cooked according to the stipulated health requirements.

Westerners, who cannot stomach what we eat, feel they could be exposed to salmonella, the bacteria that can lead to food poisoning. So never bother asking for half-boiled eggs during your holidays overseas.

Besides, what’s half-boiled eggs without kicap?

Older Malaysians have been taught from young that to stay healthy, we should have two half-boiled eggs every morning. I really do not know how, when and why some medical experts suddenly concluded that eating eggs, especially with the yolks – the best part of the eggs – can ruin your health.

One large egg is said to have 213mg of cholesterol, all found in the yolk, and eating too much of it can lead to a high cholesterol level. That’s what was said in one story I googled.

But I have also read that former British Prime Minister Margaret Thatcher had a strict diet of 28 eggs a week plus steak, salads and her favourite tipple – whisky – each time she campaigned.

That’s according to personal documents published by the Margaret Thatcher Archive Trust. She is turning 86 this year and we know for sure that this Iron Lady remains one of the best leaders the world has seen so far.

I am pretty sure Tony Blair and Gordon Brown didn’t like eggs. But I am convinced that Tan Sri Rafidah Aziz and Datuk Seri Dr Ng Yen Yen also eat plenty of eggs. They are sharp and look good. Gutsy, for sure, and they make many men politicians look like wimps.

I do not know why but eggs always seem to fly in the direction of some politicians. Joining the fray over the award of Public Service Depart­ment (PSD) scholarships, maverick minister Datuk Seri Mohamed Nazri Abdul Aziz has finally said the controversy should be discussed by taking into consideration the views of other parties, including the MCA and Gerakan.

He seems to miss the point – no one is saying that all PSD scholars should be sent overseas.What the applicants have complained about is that there have been those with less than 8A+, some allegedly with just 6A+, who have been sent overseas by the Government.

It does not matter what race or religion the applicants are but if you are not a top achiever, what are the possibilities of these scholars entering top schools like Oxford, Cambridge, Harvard or Imperial College London?

It does not make sense to use taxpayers’ money to admit them into middle or low-level universities.

Our grading system has already been questioned by top foreign universities. The high string of distinctions mean nothing to them now.

Yes, we are all aware the Prime Minister has promised that students who obtained 8A+ and above are eligible for PSD scholarships to study either locally or abroad. It’s a fantastic decision and everyone should be clear about it.

But procedures on scholarships should be clear and open. It really doesn’t make sense when there are mismatches, bad decisions and even questionable moves. It is precisely this resentment that has led to eggs being thrown at the faces of the PSD officials.

All the good intentions of the Government are now being affected because of these half-boiled, or rather half-baked, measures.

Good students deserve scholarships

I AM very disappointed over the current distribution of the Public Service Department (JPA) scholarships.As the chairman of Higher Education Bureau, National MIC Youth, I strongly believe that Education should be fair to all students irrespective of race and religion.

All Malaysian citizens must have equal rights to a good education. Many work hard to earn their good grades.

Nobody is questioning the Federal Constitution here, so there is no need for certain groups to say that we have gone against the Constitution when we raise issues affecting the community.

What we are asking is for government scholarships to be given to deserving students regardless of their race and religion.

These students are the creme de la creme. Those who scored 8A+ and above expect to be given a scholarship.

While some of the top scorers are lucky enough to be “grabbed” by neighbouring countries for their outstanding results, many are forced to look elsewhere for funding

There are also parents, who have to use up their life savings to send their children overseas. Can anyone blame these students if they do not come home after graduation?

In recent years, our government has been trying to woo overseas Malaysians who have made great strides in their chosen fields to come home, simply because of their expertise and knowledge.

It would be such a waste to lose these top achievers to other counntries, and then complain later that there is a brain drain.

Saturday, 28 May 2011

By TEE LIN SAY linsay@thestar.com.my

Guy Clapperton (pic), the author of ‘This is Social Media: tweet, blog, link and post your way to business success’ was recently in Kuala Lumpur to promote his updated book.

First published in 2009, this version offers new insights on using the social media as an efficient and measurable way for people to market their business.

Organisations, whether larger or small, are using social media and social networking to build robust communities of followers, to stay ahead of the competition and increase profits.

For business owners who want access to social networking tactics and reach new customers, Guy has simple, practical and real life examples for them.

SBW:What made you decide to write a book on social media? GC: Well, I freelance in the UK for The Guardian and The Times and I have been writing on small businesses and technology for many years. Back in 2007 to 2008, I felt I needed to get my brain around what was happening in the world of social media. There was none. My brain got into gear. There was no book on this subject, and this was something I was familiar with. I wrote to John Wiley Publications, and got a meeting with the director! They subsequently passed the book to Capstone Publishing, and thats how it all started.

What are some of the new developments included in your updated book since the first was published in 2009? Well, I got a critic who mentioned that I was too dismissive about web designers in my first book. That could have been true. So, I wrote a little bit more on web designers this time around. I also expanded on Foursquare, which is one of the first social networks that really took advantage of mobile networks from the start.

What is different in your book compared with other social media books?Buy my book because the other books are all Americans! (Laughs) Anyway, my book uses a common sense approach and incorporates lots of business and budgeting strategies. You know what’s in it for a business, how you can get involved, and how to incorporate social networking into your business plan.

What are some of the developments in social media that will shape our future moving forward?Mobile social media is going to become very important. Imagine someone standing outside your business premises and then asking on Twitter quickly whether a few thousand people know anything good or bad about it. That’s going to be important.

Do you think Malaysian or Asian companies in general, have yet to fully leverage on the benefits of social media? What are the simple things they can do to use social media to enhance their businesses?Clearly, having been here only a couple of days I’m no expert in Malaysian businesses. Several which are international as well as Asian - LG Electronics, Samsung and others - have done well and I understand AirAsia has been a very strong performer in social media. If they’re starting now I think the best thing to do is to find which social media their clients use and start marketing on those.

Do you think that social media should be one of the ways for companies to market their products? Will companies that refuse to use social media be left behind?It’s certainly going to be part of the mix. Companies that refuse social media can have different reasons. They might have found their customers aren’t interested, which would be a good reason for not spending time on it. I’d certainly recommend looking again in a couple of years if you don’t think social media is right for your business at the moment - the customer is changing.

What are some of the misconceptions about social media?People underestimate the cost incurred, they think that there is no need to pay. They don’t value the time. Hey, you’ve got to pay the guy monitoring your media traffic.

Also, social media works well only if done correctly and properly. You need to find out what the customer wants and target the right group of customers rather than sending a mass message to everyone. Also, people won’t be actively seeking you out - you need to get the message out.

You’re writing another book “This is Social Commerce” to be launched by year end. What was the inspiration for that? How different will it be from your current book?It’s a continuation in many ways. The first book is the introduction, the second develops the theme a little, talks to more businesses in depth and looks at some of the opportunities which have arisen only because social media has made them possible.

Was it always your dream to publish your own book? How exhilarating was it, to see your books on the shelves?I’ve wanted to be an author ever since I was a child and finding the book on the shelves was as magical as I’d hoped. Finding a big picture of me standing next to it in the MPH Megatore was a bit of a shock!

Will you ever consider writing fiction some time in the future?I’d love to but to be honest I’m not sure that’s where my talent lie. My current publisher doesn’t publish fiction so I’d have to start all over again. And I do like what I do for a living at the moment - trying to go into another field might set me up for a fall.

The Singaporean government overspent $3bn last year, much of it rescuing their banks from financial crisis, if it goes on like this their reserves can last 68 yrs.

The Swiss gov't overspent $1bn last year, if it goes on like this their reserves can last 262 yrs. A country normally can borrow up to 100% its GDP, a very strong industrial country or very financial stable nation can borrow up to perhaps 200% its GDP, debts over 250% GDP the country is bankrupted.

Greece 's Debts Is 113.40% GDP, In Danger As It Is Not Considered A Strong Industrial Or Financial Country.

Iceland Is 107.60%, Also In Crisis As It Is Not So Strong Industrial Or Financially.

Singapore Debts Is 113.10%, Not In Hot Water Due To Its Global Financial Hub Status, And Also Its Financial Strength. It's Only Dangerous For Singapore When It Reaches 200%

Japan Debts Is 189.30%, Still Under Radar As A Powerful Industrial Nation. It Needs To Panic Only At Around 200%

US Has The World Largest Debts, But It Is Only 62% Its GDP, It Is Not In Any Immediate Danger Of Bankruptcy.

Zimbabwe Debts Is 282.60% GDP, It Is A Bankrupted Nation.

MalaysiaDebts Is Currently At 53.70% GDP.

Hong Kong And Taiwan Is Doing Pretty Good With Debts At 32-37%GDP

South Korea Is Even Better With Debts At 23.5% GDP

China Is Very Stable With Debts At 16.90% GDP

Russia Is Like A Big Mountain With Debts Only at 6.30% GDP

There Are Only 5 Countries With No Debt (I.E. 0%) :Brunei , Liechtenstein , Palau , Nieu, And Macau Of China .

Immigration is a boon to American science and math, a new report asserts, noting that 70 percent of the finalists in a recent prestigious science competition are the children of immigrants.

The report by the National Foundation for American Policy, a nonprofit research group in Arlington, Va., states that many immigrant parents emphasize hard science and math education for their children, viewing those fields as paths to success.

Statistics supporting that belief: According to a recent Georgetown University study on the value of undergraduate majors, the lifetime median annual income for someone with a bachelor's degree in engineering is $75,000, compared with $29,000 for a counseling or psychology major. [Infographic: Highest-paying College Majors]

That study found that the highest earners are petroleum engineers, with median annual earnings of $120,000.

Only 12 percent of Americans are foreign-born, the NFAP report says. Even so, children of immigrants took 70 percent of the finalist slots in the 2011 Intel Science Talent Search Competition, an original-research competition for high school seniors.

Of the 40 finalists, 28 had parents born in other countries: 16 from China, 10 from India, one from South Korea and one from Iran.

"In proportion to their presence in the U.S. population, one would expect only one child of an Indian (or Chinese) immigrant parent every two and a half years to be an Intel Science Search finalist, not 10 in a year," wrote the report's author, NFAP director Stuart Anderson.

Finalists interviewed for the report attributed their interest in research to their parents' attitudes.

"Our parents brought us up with love of science as a value," David Kenneth Tang-Quan, whose parents emigrated from China to California, told Anderson, according to the report.

Still, children of immigrants face barriers outside of the education system. According to the Georgetown report, racial disparities in pay persist even within science fields. Whites with an undergraduate major in engineering out-earn Asians with the same degree by about $8,000 a year. African-American and Hispanic engineering graduates fare worse, making about $60,000 and $56,000 per year, respectively, compared with whites' $80,000.

Asians out-earn whites in the fields of health, law and public policy; psychology and social work; and biology and life sciences.

The fact that children of immigrants excel in science and math should be taken into account when making immigration policy, Anderson wrote: "The results should serve as a warning against new restrictions on legal immigration, both family and employment-based immigration, since such restrictions are likely to prevent many of the next generation of outstanding scientists and researcher from emerging in America."

OPTIMISTICALLY CAUTIOUS By ERROL OH

A LOT is being said about the audit profession these days. After all, why should the auditors be out of the line of sight in the frenzy of finger-pointing in the wake of the global financial crisis?

It's easy to assign blame on hindsight, but nevertheless, when large and seemingly invulnerable businesses have collapsed or have come close to oblivion as a result of large-scale mismanagement and fraud, it's safe to conclude that a lot of regulators and professionals have surely dropped the ball.

They have missed the warning signs and have failed to raise the alarm. There's no doubt that the auditors belong in this group.

In a consultation paper released last October, the European Commission (EC) observes: “While the role played (in the financial crisis) by banks, hedge funds, rating agencies, supervisors or central banks has been questioned and analysed in depth in many instances, limited attention has been given so far to how the audit function could be enhanced in order to contribute to increased financial stability.”

This so-called Green Paper, titled Audit Policy: Lessons from the Crisis, solicited responses to questions that were designed to help the EC figure out how to improve the European audit market. However, many of the issues raised are applicable in most other parts of the world.

Then, in January this year, the New York-based International Auditing and Assurance Standards Board (IAASB) came out with a thought piece called Audit Quality: An IAASB Perspective. This publication too sees a connection between the financial crisis and the auditors.

“The turbulent events of the global financial crisis have highlighted the critical importance of credible, high-quality financial reporting. They have also demonstrated the importance of considering the role of audit quality in the broader context of quality financial reporting.

Achieving quality financial reporting depends on the integrity of each of the links in the financial reporting supply chain,” wrote IAASB chairman Professor Arnold Schilder.

“As one of those links, the external audit plays a major role in supporting the quality of financial reporting around the world, whether in the context of the capital markets, the public sector or the private or non-public sector. It is an important part of the regulatory and supervisory infrastructure, and thus an activity of significant public interest.”

Naturally, the enforcement agencies sometimes have a more severe view on how the auditors have contributed to the crisis. Last December, the New York attorney general sued Ernst & Young, the longtime auditors of Lehman Brothers, whose application for bankruptcy protection in September 2008 is considered one of the triggers of the crisis. The lawsuit alleged that the Ernst & Young helped Lehman Brothers engage in a “massive accounting fraud”.

Another Big Four firm, PricewaterhouseCoopers (PwC), also had to endure the harsh glare of publicity recently in the aftermath of a large corporation's downfall. In this case, the company is India's Satyam Computer Services, whose chairman confessed that the IT service provider's accounts had been falsified.Last month, the United States' Public Company Accounting Oversight Board (PCAOB) announced a settled disciplinary order against five PricewaterhouseCoopers International firms based in India. Two of those firms were slapped with a US$1.5mil penalty.

This is in addition to a US$6mil penalty imposed by the Securities and Exchange Commission (SEC) against the five firms. The combined $7.5mil penalty imposed in this matter is the largest that the SEC and PCAOB have assessed against any registered foreign accounting firm.

On May 16, the IAASB issued a consultation paper titled Enhancing the Value of Auditor Reporting: Exploring Options for Change. “The purpose of this international consultation is to determine whether there are common views among key users of audited financial statements and other parties to the financial reporting process about the usefulness of auditor reporting, and to explore possible options to enhance the quality, relevance and value of auditor reporting,” the board explains.

Clearly, now is as good a time as any to have discussions on the importance of the work of auditors. The question is, are Malaysian investors participating in this dialogue? Going by how shareholders are generally passive about the appointment of auditors of listed companies, the answer can only be no.

For that matter, when was the last time we hear minority shareholders openly and vigorously questioning the management and board's choice of auditors? It's standard for an AGM agenda to include the re-appointment of the auditors and the authorisation of the directors to fix the auditors' remuneration. Year in and year out, the shareholders at the AGM will dutifully pass such resolutions on the assumption that the directors and the auditors are doing what they're supposed to be doing when it comes to ensuring audit quality.The average minority shareholder of a listed company probably doesn't even know which firm audits the company. There's this dangerous perception that all auditors are more or less the same, and that it's not up to the investors to demand for audit quality.

There are several questions that shareholders (and investors, in general) should be asking about the auditors and their selection by the management.

How were the auditors picked, and how did the board satisfy itself that it had found the best firm for the job? Who is the partner of the firm who will oversee the audit and how is he qualified to handle that role? Do the audit fees reflect the extent of work required? Bear in mind that in audit, a bargain is not always a good thing. If the same firm has been the auditors for a long time, is there a need to consider a change? How do the auditors ensure independence?

Yes, these are rather dull and procedural areas, but isn't it better to tackle these questions now than after the breakdown of a company?

Executive editor Errol Oh has said this before and he'll say it again many people don't understand what is it that auditors really do.

Friday, 27 May 2011

A 10-year study has revealed that the electron is very spherical indeed.

To be precise, the electron differs from being perfectly round by less than 0.000000000000000000000000001 cm. To put that in context; if an electron was the size of the solar system, it would be out from being perfectly round by less than the width of a human hair.

The Imperial College team behind the research, which was conducted on molecules of ytterbium flouride, used a laser to make measurements of the motion of electrons, and in particular the wobble they exhibit when spinning. They observed no such wobble, implying that the electron is perfectly round at the levels of precision available, reflected in the figure above.

The co-author of the report describing the research, Jony Hudson, said: “We’re really pleased that we’ve been able to improve our knowledge of one of the basic building blocks of matter. It’s been a very difficult measurement to make, but this knowledge will let us improve our theories of fundamental physics. People are often surprised to hear that our theories of physics aren’t ‘finished’, but in truth they get constantly refined and improved by making ever more accurate measurements like this one.”

The next step is to up that precision level even further, using new methods to cool the molecules to extremely low temperatures and control their motion. The results are important in the study of antimatter, and particularly the positron — which should behave identically to the electron but with an opposite electrical charge. If more differences can be found, it could help to explain why far less antimatter has been discovered in the universe than predicted by theory.

Thursday, 26 May 2011

PARIS / BEIJING - France's Christine Lagarde announced her candidacy for the presidency of the International Monetary Fund, amid calls from the five major emerging economies for an end to the tradition that a European chairs the IMF.

France's Finance Minister Christine Lagarde announces her candidacy to head the IMF during a press conference in Paris, May 25, 2011.[Photo/Agencies]

The French finance minister announced her intentions on Wednesday, the eve of a G8 summit, after securing the backing of the 27-nation European Union and support from the United States, diplomats said.

"It is an immense challenge which I approach with humility and in the hope of achieving the broadest possible consensus," Lagarde told a news briefing

Former IMF chief Dominique Strauss-Kahn, a French citizen, resigned last week after being charged with attempted rape.

Brazil, Russia, India, China and South Africa on Tuesday criticized EU officials for suggesting that the next IMF head should be a European, a convention that dates back to the founding of the global lender at the end of World War II.

However, the countries, known as the BRICS, failed to unite behind a common alternative candidate.

In the first joint statement issued by their directors at the IMF in Washington, the BRICS said that the choice of who heads the IMF should be based on competence, not nationality. They called for "abandoning the obsolete, unwritten convention that requires that the head of the IMF be from Europe".

The statement was made one day after nominations for the job opened.

"The recent financial crisis which erupted in developed countries underscored the urgency of reforming international financial institutions so as to reflect the growing role of developing countries in the world economy," said the statement.

Chinese experts said the statement should be taken seriously.

"If developed countries don't respect the opinion of the BRICS, Lagarde is very likely to fail to win enough votes," said economist Guo Tianyong, director of the Research Center of the Chinese Banking Industry at the Central University of Finance and Economics.

BRICS account for about 11 percent of the voting rights, and Lagarde needs 85 percent of the votes to get the position.

Indian Prime Minister Manmohan Singh said at a news conference in Addis Ababa on Wednesday at the close of the India-Africa trade summit that emerging countries should take a united stand on this issue.

"The reform of the global institutions, and that includes the Bretton Woods institutions (the IMF and World Bank), has been high on the agenda of developing countries for a long time," AFP quoted him as saying.

"But we have also to recognize that international relations beyond a point are power relations and that those who wield power do not wish to yield ground very easily," he said.

Public statements made recently by high-ranking European officials contradict public announcements made in 2007, at the time of the selection of Strauss-Kahn.

Jean-Claude Junker, president of the Eurogroup (finance ministers of the eurozone), then declared that "the next managing director will certainly not be a European" and that "in the Eurogroup and among EU finance ministers, everyone is aware that Strauss-Kahn will probably be the last European to become director of the IMF in the foreseeable future".He Weiwen, an expert at a research institute affiliated to the Ministry of Commerce, said whether the convention will end depends on the US, which holds 17.75 percent of IMF shares and 16.8 percent of the voting rights.

"It's still very difficult for emerging economies to challenge the tradition" because the US is very likely to favor a European candidate as it will get reciprocal support from Europe for an American to run the World Bank, he

Officials from the BRICS emphasized that the new managing director should be selected after broad consultations with the membership, and said that adequate representation of emerging markets and developing members in the IMF management is critical for its legitimacy and effectiveness.

Developing countries have spent years attempting to reform the key global economic institution, as emerging economies became the major drivers of world economic development.

China last week said that the new IMF leader should be chosen on "merit, transparency and fairness".

Li Daokui, an adviser to the Chinese central bank's monetary policy committee, said earlier that the chances of a European taking the position are slim, but supporting a Chinese candidate is not the best choice for the country.

"I think a talent from a neutral and small country would accord more with the interests of the world, including China, because big countries such as India and Brazil have too many national interests," he said.

Wednesday, 25 May 2011

COMMENT By BARADAN KUPPUSAMY

The DAP, which has seen little success in drawing Malays into its party, is banking on the newly-launched Roketkini.com, a news portal in Bahasa Malaysia, to change the mind of the community.

THE DAP has always claimed to be a multi-racial party but has always struggled to win over Malays in any large numbers to its Malaysian Malaysia banner.

In the 1980s, it had a prominent Malay in the late Ahmad Nor, the Cuepacs president who was a firm believer in the party's struggles.

In recent times, the DAP has recruited the prominent Tunku Abdul Aziz, a co-founder of the Malaysian chapter of Transparency International, as its vice-chairman.

The party had hoped that more Malays would follow him.

His recruitment five months after the March 8, 2008 general election was hailed as the way to go for the multi-racial but Chinese-dominated DAP as it seeks to replace the MCA and Gerakan as the main contender for the support of the Chinese.

In peninsular Malaysia, the Tamil support for the DAP has also grown in the wake of the 2008 polls with the rise of Dr P. Ramasamy as the titular head of the Indian wing.

His elevation as Deputy Chief Minister of Penang, a first for Indians, was greeted with awe by the community that thus far had to be content with MIC president Datuk S. Samy Vellu as the sole minister in the Barisan Nasional government.

In Perak after 2008, another Indian was elevated to state assembly Speaker but Tronoh assemblyman V. Sivakumar's tenure of service was cut short by the defections of three state assemblymen two from PKR and one from DAP in February 2009 and the fall of the Pakatan Rakyat government. (That Speaker post was taken over by another Indian from Barisan, also for the first time in history).

However, after trying for about three years, Tunku Abdul Aziz announced last week that he had failed to recruit Malays to the DAP and that his presence in the party had not helped to win over the Malay grassroots in any appreciable number.

It was an honest admission that the party had failed to recruit Malays despite trying very hard.

The primary reason is that the DAP is seen by the Malays as a Chinese party, fighting for Chinese rights in a country dominated by Malays and is therefore to be avoided.

While Malays do want to interact with the DAP, they would rather do so as distinct members of the PKR or PAS and not as individuals or as members of the DAP.

Post-2008, the DAP's experience with Malays has changed dramatically with many opportunities opening up to understand Malay problems closely.

No longer is the DAP shunned or avoided by the Malays as a Chinese party.

In the Tenang by-election, the over- zealous DAP turned PAS candidate Normala Sudirman into a “Chinese empress” all decked out in traditional Chinese clothes so the Chinese voters there could accept her.

Umno must make up its mind on DAP's 'racism'

But the rapport with the Malays from these encounters is just not enough for the party which has grand visions of leading the democratic movement in the country.

The recent Sarawak elections showed that the DAP is a clear winner among the Pakatan Rakyat parties.

It also pointed to DAP being able to win over the urban masses of all races, not just in Sarawak but also in the peninsula and most likely in Sabah as well.

The Sarawak victory, however, showed its weaknesses as well it is an urban force and its failure to have a say over the vast rural reaches, which it surrendered to PKR, has come back to haunt it.

That is why party adviser Lim Kit Siang proposed a merger with SNAP to get at SNAP's rural connections although the party lost nearly all of its deposits in the Sarawak polls.

Still, the question remains: Why won't the Malays join the DAP? Is not the DAP also fighting for the same things that the Malays want?”

These questions have forced the DAP into a brand new strategy to win over the community.

By forming Roketkini.com, helmed by editor Wan Hamidi Hamid, it hopes to reach out to the Malay grassroots. Its aim is to reach out to them by providing views that are distinct from PKR or PAS.

How well it does and how many Malays it can wean from Umno are all questions that only time will tell.

Tuesday, 24 May 2011

I think we can all agree that China has a lot of newly minted millionaires and billionaires, and that along with the only slightly less privileged they’ve made a significant impact on the global luxury market.Without a doubt, they make great copy—expressing their collective capitalist thoughts by buying up expensive cars, yachts, private jets and even helicopters.

All photos by M. Scott Brauer

But what about the common people on the street? What’s the average Zhou Blow thinking and what does he have to say?

Enter We Chinese, a photo project that doesn’t profess to be much more than that, but still provides a fascinating quick read on what Chinese people think about China and the part they see themselves playing in their homeland’s future. A few random excerpts:

“I am a builder of China’s future, just like a component of an airplane, and with me China will soar even farther in the future,” said Cen Qi, 24, a student. “China includes Taiwan, where Chinese people reside, and it is the abbreviation of the People’s Republic of China.”

“China is just the name of a country,” said Bo Wei Jun, 36, an engineer. “Occasionally the people bring up suggestions, but nobody listens.”

[China means] “hope, power and culture,” said Ya Ming, 47, a reporter. [My role] is “to make a bigger contribution to world peace.”

“A ‘voiceless’ person has no way of offering society even the smallest contribution,” said Rui Ling Yan, 21, a student. “China is my ancestral country mother. It’s what I hold most dear.”

Scott Brauer, a photojournalist and former China resident, started the We Chinese project as a way to respond to friends’, family’s, and strangers’ questions about the global direction of China and their stereotypes of the people.

“The project aims to give faces and voices to a small section of the Chinese people caught in the center of historic shifts in the country’s socioeconomic circumstances,” said Brauer.

While you can’t draw any conclusions about the entire population—the final project has just 100 portraits and short interviews—the sentiments are revealing. Brauer says: “the responses range from prosaic to poetic, from rote to inspired, and from unemotional to patriotic. The people photographed expressed a sincere love of country and optimism about the country’s future development and peaceful position in the world.”

For a more in-depth look at China, as told by leading participants in or observers of China’s transformation over the past three decades, go to Asia Society’s China Boom website which I wrote about previously here.

Researching and writing Legacy of Honour was an inspiring journey for Zainah Anwar. – AHMAD IZZRAFIQ ALIAS / The Star

CERITALAH By KARIM RASLAN

The Malay community owes three generations of the illustrious Johor-based aristocratic Onn family a great debt of honour. They were leaders far, far ahead of the times.

HISTORY matters. We need to understand the forces that shaped our past in order to craft our future. Self-knowledge is critical. Ignorance will mean we end up repeating the mistakes of the past.

Zainah Anwar’s well-written and intimate personal history of three generations of the illustrious Johor-based aristocratic Onn family — Legacy of Honour — is an important book for all Malays and all Malaysians.

As a Johorean herself whose father Cikgu Anwar served with Datuk Onn Jaafar, Zainah has woven together Malaysian contemporary history, economics, culture and politics.

Moreover, the book’s appearance is timely. We are living in an era when honour, principle and public service are often ignored and/or ridiculed.

With Legacy of Honour we are reminded of excellence, with three remarkable leaders — two Johor Mentris Besar, Datuk Jaafar Mohamed and Onn Jaafar, and one Prime Minister, Tun Hussein Onn.

Indeed, the men — all from the same family — were to shape public policy and governance for well over a century, from the 1850s right through to the early 1980s.

They were open-minded men: curious and equipped with bold ideas.

At the same time they had the courage of their convictions. In the case of Umno’s titanic founder, Onn Jaafar, this sense of principle was to lead to his premature departure from the party and his isolation in later years.

Nonetheless, they were also intensely driven men.

Once again, Onn Jaafar stands out. For example, he would always talk about wanting to “betulkan orang Melayu” (correct the Malays) by modernising and improving Malay living standards and conditions.

Jaafar Mohamed was born in 1838. Coming from a long line of palace advisers, he started his career as a clerk at his uncle’s office, who was a Minister to Temenggong Ibrahim and later went onto become Dato Bentara (State Secretary) at the age of 25.

In 1885, he was appointed the first Mentri Besar of modern Johor, a post he held until his death in 1919.Jaafar was responsible for the creation of modern Johor.

Working alongside Sultan Abu Bakar, he was to build Johor from the ground up until it became the strongest and most prestigious of the Malay states.

He was an exacting but fair man who recognised the importance of the rule of law. As such he set out the “kangcu” system of land usage and taxation for Chinese settlers.

Both he and Sultan Abu Bakar achieved their ends without losing their highly cherished independence to the British. Educated in both English and Malay from an early age, Jaafar was unafraid of new ideas as long as they delivered results — prosperity, stability and sovereignty for his beloved state.

However, he also prized his Malay cultural roots very highly and in his spectacular residence, Bukit Senyum in Johor Baru, he created a distinguished environment where the cherished collection of Malay literature such as syairs, hikayats and novels were to be found.

And the children were all expected to learn how to perform ghazals — the Middle-Eastern inspired poetic form consisting of rhyming couplets and a refrain.

At the same time, his many children and especially his daughters — flouting conservative sentiment — went to English language schools.

With Jaafar’s death, the family were to lose their beloved Bukit Senyum residence.

The family’s difficult relations with Sultan Ibrahim meant that Onn Jaafar moved to Singapore where he emerged as a fervent critic of royal injustice and misadministration.

Onn Jaafar was to become an indefatigable journalist and editor. His trenchant criticisms of Malay backwardness and failure were read across the peninsula, earning him enormous respect among the ordinary people.

This in turn laid the groundwork for his greatest task — the unification of a divided Malay community in the face of the British initiative, the Malayan Union, and the formation of Umno.

Onn Jaafar had an immense capacity for work. His energy was unequalled.

This level of diligence was apparent in the late Tun Hussein Onn, who was known for his unflinching dedication to detail — underlining the salient points in every report he read.

The Malay community owes all three men a great debt of honour. Suffice to say they were leaders far, far ahead of the times.

Indeed, Malaysia is in dire need of more leaders in a similar mould, men who have the confidence and polish to reach across race, class and religious boundaries.